Question
MAM Construction Company must choose between two types of cranes. Crane A costs $650,000 now, will last for five years, and will require $80,000 in
MAM Construction Company must choose between two types of cranes. Crane A costs $650,000 now, will last for five years, and will require $80,000 in maintenance each year. Crane B costs $750,000 now, will last for seven years, and will require $50,000 in maintenance each year. Maintenance costs for cranes A and B occur at the end of each year. The appropriate discount rate is 13 percent per year. Ignore tax. Which machine should MAM Construction purchase? Show your workings. (15 marks)
Show your answers and workings in the space provided; or write your answer on paper, take a photo and upload it.
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